Tesla CEO Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 (ONS) meeting in Stavanger, Norway on August 29, 2022.
Carina Johansen AFP Getty Images
Tesla Shares are up 33% this week, marking the best weekly performance since May 2013 and the second best on record.
The stock rose 11% on Friday to close at $177.88. The rebound follows a six-month period in which Tesla shares have fallen more than 40%. The stock’s 65% drop in 2022 is the worst in Tesla’s 12 years as a public company.
Tesla’s rally this week was helped by an upbeat fourth-quarter earnings report. During a call with shareholders and analysts, CEO Elon Musk said that the company aims to produce 2 million vehicles by 2023, and he suggested that demand will support sales of these cars as well.
Official guidance calls for production of 1.8 million vehicles this year. The company has not revised its long-standing target of a compound annual growth rate of 50% over the years.
Tesla’s five-day performance is projected against Rivian and Ford Motor Company.
Tesla beat on the top and bottom lines, recording total revenue of $24.32 billion, including $324 million of deferred revenue related to Tesla’s driver assistance system. The company cut car prices dramatically in December and January, fueling concerns about demand and increasing inventory.
Analyst reaction to Tesla’s numbers was mixed.
“For bulls, the growth story is alive and well,” Bernstein’s Toni Sacconaghi, who has an underperform rating on the stock, wrote in a note on Thursday. “For bears, the numbers don’t lie.”
In early January, Tesla reported unexpected fourth-quarter vehicle deliveries and production.
The jump in Tesla shares comes amid a broader market rally. At S&P 500 up 2.2% for the week and the Nasdaq gained 4.3%.
Another US-based electric vehicle maker saw its stock climb higher. Rivian rose 22% during the week, while shares in the legacy automakers Ford and General Motors each gained more than 7%.
Electric car manufacturers are competing Lucid spiked on Friday as well, rising 43% on reports of rumors that Saudi Arabia’s state wealth fund, the Public Investment Fund, intended to take private companies.
Some of Tesla’s poor performance last year was due to Musk’s shift in focus to Twitter, which it acquired for $44 billion in October. Under Musk’s leadership, Twitter experienced mass layoffs and fleeing advertisers, destroying morale.
Tesla remains the second-shortest stock in the US market, just behind Apple, which means that a large number of investors are betting on the decline of the population. Over 94 million shares of the automaker were shorted, according to data from S3 Partners.
Despite the rally, active short selling continues, S3 managing director Ihor Dusaniwsky told CNBC. Short sellers see Tesla’s appreciation as having created “an overheated and overbought stock that is unlikely to reverse in the short term,” he said. Last week, S3 Partners said it saw a 3.9% increase in total shorted shares, while investors shorting the stock lost $4.3 billion over the stretch.
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